Non-Core Promise?

"Treasurer Peter Costello has increased pressure on the Federal Opposition and the state Labor premiers to support the Commonwealth's industrial relations agenda, warning interest rates could rise without the changes....
Mr Costello will not comment on whether he thinks interest rates will rise, but says low unemployment and labour shortages could lead to wage rises, which in turn increase inflation".

Once again the interest rate bogey man is trundled out.

Its left me confused though. I seem to recall that back around election campaign time our PM told us that a vote for Labor was a vote for higher interest rates than under a Liberal govt (due to Labor's record on deficits exerting upward pressure on interest rates, as well as a claim that labor would revert to an industrial relations system with wage rises that were not based on productivity increases).

Now Peter seems to be telling us that no matter how good IR has been under the Libs, its all going to go pear shaped because labour shortages could lead to wage rises, but that this can be prevented if we run a centralised IR system.

I'm not really sure how a centralised labour system is going to prevent labour shortages. Perhaps by making it easier to let people go? Or will a centralised system have some sort of loaves and fishes effect on the workforce, ensuring that there is enough labour force for all?

If the solution to keeping interest rates low is lower wage increases and possibly higher unemployment, then is that really any better than the problem it allegedly solves? So you might avoid or postpone an interest rate hike, but aren't you going to have less money in your pocket anyway with a smaller wage rise or time out of the workforce?